Racing industry has misguided fear of embracing exchange wagering

Updated September 14, 2017 - 7:35 pm

As discussed in last week’s column, exchange wagering is an exciting new way of betting on horse racing that benefits horseplayers by letting them lock in odds. So why is it available in the U.S. only in New Jersey?

The reason is not terribly surprising. Many of racing’s varied constituencies – racetracks, horsemen, jockeys, owners and states – fear it will mean less revenue, since the commission deducted from a winning exchange wager — 12 percent in New Jersey — is less than the traditional 16 to 20-something percent takeout subtracted by racetracks. That, in theory, means less money to go around to keep the sport running.

But as Kip Levin, CEO of Betfair US and TVG, the horse racing television network, explained in last week’s column, the experience in New Jersey shows it has largely attracted new participants to the sport who are familiar with financial markets and sophisticated trading tools.

“When we talk to the industry, there has always been this concern because the model is different … that you’d be cannibalizing the handle,” he said. “(In New Jersey) there has been no cannibalization. That was completely unexpected and to me is the reason I’m optimistic that people will say ‘wow, this is actually bringing in new customers.’”

Even so, persuading racing’s interest groups to embrace the new technology has proved challenging. Betfair has been in talks in California, which changed its law to enable exchange wagering, for more than six months and has yet to reach a deal.

It seems inevitable that more states will soon authorize exchange betting on horses. But after years of seeing the fractured racing industry shoot itself in the foot, I won’t be surprised if it takes longer for that to happen than it should.

Horseplayers in Nevada may be in for an even lengthier wait. The Silver State is not near the top of Betfair’s list of jurisdictions where wagering laws can be tweaked to enable exchange wagering.

“We have looked at Nevada,” said Levin. “It’s a challenge because they have different laws for online betting and for ADW (advance deposit wagering) and they obviously have a pretty rigorous licensing process. … The cost of licensing has so far been too great to justify the size of the market.”

#RJhorseracing featured races

Off a fantastic performance last week at Kentucky Downs in which our handicapping corps picked the top two and top three finishers of our featured races, we’re turning our collective attention this week to Saturday’s 8th and 9th races at Belmont Park.

In the 8th, a mile allowance race for 3-year-olds and up, our crowd ‘cappers make Meantime (7-2 second choice on the morning line) a narrow pick over Harlan Punch (5-1) and Spieth (4-1). Surprisingly, 3-1 morning line choice Faja didn’t crack our top 3.

Reader Shelly Benardo sums up Meantime’s appeal: “Meantime. (Luis) Saez an aggressive rider out of the gate, second off the layoff, wide trip pressed all the way in last. (Trainer Brian) Lynch did not win many at the spa, overdue.”

I should know better, but I’ll go my own way with #3 Hammerin Aamer, who I think should save ground early under Jose Lezcano, then tag ‘em late.

In the 9th, the Sands Point Stakes (Gr. 2), a 1 1/8-mile test for 3-year-old fillies, our corps makes Uni (3-1 on the morning line) the strong choice, with La Coronel (4-1) and Inflexibility (6-1) filling out the placings. I do think Uni is the horse to beat, but I think La Coronel can get the jump on him and prevail in a tight finish.

You can join the fun next week. Email me to receive an alert when the free past performances are posted or check Twitter under the hashtag #RJhorseracing on Wednesday. Then email or tweet your top 3 picks along with a brief analysis and wagering strategy by 5 p.m. Thursday. If I use your comment in Friday’s column, there’s a packet of Review-Journal breath mints in it for you. Nothing could be finer!

Contact Mike Brunker or 702-383-4656. Follow @mike_brunker on Twitter.

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